Mitigation & Contribution (Part 2)

My last article addressed a recent decision of the Employment Court which examined both mitigation of loss and contribution. As I said the implications of the decision, in terms of contribution, would be discussed in a later article; this article.

The Employment Relations Act requires the Authority or the Court (whichever is hearing the claim) to consider contribution. What this means is that after finding a claimant has a valid personal grievance the Authority or Court must then (and the word “must” is used, meaning this is mandatory) go on to look at whether, although the dismissal or action was unjustified, the employee contributed to the situation. If so, what does this mean in terms of remedies?

Reducing remedies when claimant partly to blame

Because contribution must be considered in every case where there is a valid grievance there are many cases which discuss the topic. There have also been a vast number of cases where remedies have been reduced because of contribution. Reducing remedies means that the compensation and/or reimbursement of lost wages is reduced by virtue of the fact the claimant is partially to blame. Due to the number of decisions which discuss contribution it was difficult to work outlines of reasoning. The recent decision of the Employment Court, however, undertook a thorough examination of contribution and set out some guiding comments.

The first comment which, in my view, altered the playing field somewhat relates to the idea of “100 percent contribution”. In some earlier decisions successful claimants had been found to have wholly contributed to the unjustified act. What this meant was that whilst there was some unjustified conduct (such as an unjustified dismissal), because of the claimant’s actions there was no award of any remedies.

No such thing as 100% contribution

What the Employment Court said was that it is not appropriate for a finding of 100% contribution. How can an unjustified dismissal be said to be wholly the fault of the aggrieved party? Simply put, the Court said it can’t be. The Court did, however, say that any remedies - reimbursement of lost wages or compensation - are discretionary. The Authority, or the Court, could simply award no remedies because of a claimant’s actions. So this may be a distinction without a difference.

Levels of contribution

Of perhaps more significance was the Court’s comments about the level of contribution. In the past, there have been numerous occasions where remedies were reduced by 50 percent or thereabouts. There were some cases which reduced remedies by less, and others by more, but there did seem to be a clustering of cases within a stone’s throw of 50 percent.

What the Court said was that a reduction of that amount (50 percent) was significant. This, to me, suggests reductions greater than 50 percent may now only involve cases “out of left field”. Even cases at the level of 50 percent may now indicate a finding of higher contribution than such a result would have indicated in the past.

I suppose only time will tell whether the Court’s comments will have a long-term effect in terms of the level of contribution in new cases.